Warren Buffett’s Berkshire Hathaway Inc (BRKa.N) said on Friday it agreed to pay $9 billion to buy the parent of Texas power transmission company Oncor Electric Delivery Co, stepping up its pursuit of steady profits from utilities and infrastructure deals.

If the all-cash purchase wins approval from federal and state regulators and a bankruptcy judge, Buffett’s Berkshire Hathaway Energy unit will assume control of one of the largest U.S. electricity transmission companies.

“Buffett views infrastructure bets as a good long-term investment,” said Steven Check, president of Check Capital Management Inc in Costa Mesa, California, which invests $300 million of the $1.4 billion it oversees in Berkshire.

“With the relatively limited opportunities available to a company of Berkshire’s size, investments such as Oncor that are likely to yield 8 to 10 percent annually are acceptable,” Check added.

Investors consider him a top candidate to succeed Buffett, 86, at the Omaha, Nebraska-based parent company’s helm.

Abel and other Berkshire Hathaway Energy executives were not available on Friday for interviews. Buffett’s office did not respond to separate interview requests.

‘RECESSION RESISTANT’

Dallas-based Oncor delivers power to more than 3.4 million homes and businesses through roughly 122,000 miles (196,000 km) of transmission and distribution lines.

It is 80 percent owned by Energy Future Holdings Corp, the company Berkshire has agreed to buy out of bankruptcy.

Oncor posted $431 million of profit in 2016, and similar sums in the prior three years.

Buffett values such consistency, telling Berkshire shareholders in February that utilities generate “recession-resistant” earnings because they offer an “essential service” that generates “remarkably steady” demand.

Meanwhile, Abel said in a statement the companies “share a common goal of providing exceptional customer service and a commitment to invest in critical infrastructure.”

Abel has also been deepening his commitment to renewable energy, including wind, generating tax credits that bolster Berkshire’s balance sheet. His unit also owns HomeServices of America, a big residential real estate brokerage.

“Buffett has always had a lot of confidence in Greg Abel, and wouldn’t mind putting a nearly unlimited number of businesses under his watch,” Check said.

TEXAS REGULATOR

The Oncor purchase requires approval by the Public Utility Commission of Texas (PUCT), which in 2016 and 2017 scuttled takeover bids by privately held Hunt Consolidated Inc and NextEra Energy Inc (NEE.N).

Regulators had asked for Oncor to be “ringfenced” so it would not assume excess debt from any acquirer, and also not pay out too much cash as dividends.

Unlike NextEra, “Berkshire might be more willing to leave the ringfence in place and allow restriction on dividends, making the approval process “a little less cumbersome,” Cowen Co analyst Amer Tiwana wrote in a research report.

The PUCT is required by law to rule on Berkshire’s bid within six months of receiving an application.

A spokesman declined to comment on Berkshire’s prospects.

But Buffett wrote last year that regulators like Berkshire Hathaway Energy because it operates safely and efficiently and has “unlimited capital to fund whatever projects make sense,” without the need to pay dividends to its parent.

Berkshire expects to complete the Oncor purchase in the fourth quarter.

It said the transaction implies an equity value of about $11.25 billion for Oncor. Kirkland Ellis, a law firm representing Energy Future, said the transaction’s enterprise value was about $18.1 billion.

Energy Future was created from the $45 billion leveraged buyout in 2007 of the former TXU Corp by KKR Co, TPG Capital Management and Goldman Sachs Group Inc’s (GS.N) private equity arm.

The buyout was a bet that natural gas prices would rise, allowing for higher electricity prices. Natural gas prices plunged instead, and Energy Future went bankrupt in 2014.

Assuming the Oncor transaction closes, Oncor CEO Bob Shapard would become executive chairman and be replaced by general counsel Allen Nye, under a previously announced plan.

(Reporting by Jonathan Stempel and David French in New York; Additional reporting by Jessica DiNapoli in New York and Kanishka Singh and Subrat Patnaik in Bengaluru; Editing by Bill Rigby and Meredith Mazzilli)